MGKS
|
Jocelyn Pension Consulting
|
Hessel & Associates, LLC
|
Manager - Defined Contribution Plans M2B Retirement Consulting LLC
|
Hicks Pension Services
|
Retirement Plan Relationship Manager â DB or DC Focus Trinity Pension Consultants
|
Compliance Analyst - 401(k) Administration Ubiquity Retirement + Savings
|
EPIC RPS
|
Junior Implementation Specialist - 401(k) Administration Ubiquity Retirement + Savings
|
United Benefit Pensions Inc.
|
Nicholas Pension Consultants
|
Senior Defined Contribution Account Manager Nova 401(k) Associates
|
Site Manager / Senior Administrator Nicholas Pension Consultants
|
Loren D. Stark Company
|
NFL Player Benefit Office
|
401(k) Retirement Plan Administrator Midwest TPA with Remote Workforce
|
Loren D. Stark Company
|
Retirement, LLC
|
Aimpoint Pension
|
“BenefitsLink continues to be the most valuable resource we have at the firm.”
-- An attorney subscriber
|
|
Question 214: My client has a professional practice as a sole proprietorship, with a defined benefit plan. He also has several domestic employees: gardener, housekeeper, nanny, etc. He is concerned about the domestic employees and wants to do something for their retirement, but he doesn't want to include them in the defined benefit plan. I'm concerned about whether I need to count them in the plan regardless. What can we do? | |
Answer: Fortunately, this is an issue which became somewhat more clear after EGTRRA, especially since it added an important tool for these situations.
The bottom line is that your client should be able to continue his defined benefit plan covering only his business employees. The household employees do not need to be counted in determining whether than plan satisifies the coverage and participation requirements of the law. In addition, your client should be able to establish a SIMPLE IRA or a SIMPLE 401(k) covering only the household employees, ignoring the business workers. Obviously, the client himself would only participate in the defined benefit plan. This is discussed with additional examples in the forthcoming third edition of my book, Who's the Employer. |
Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner or to readers. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of this and similar situations.
The law in this area changes frequently. Answers are believed to be correct as of the posting dates shown. The completeness or accuracy of a particular answer may be affected by changes in the law (statutes, regulations, rulings, court decisions, etc.) that occur after the date on which a particular Q&A is posted.
Related links: |